Table 14.1—Monetary data (questions 10 – 16) Item Amount Cash held by public $12

Question

Table 14.1—Monetary data (questions 10 – 16)

Item

Amount

Cash held by public

$120 billion

Transaction account balances

$800 billion

Required reserves

$80 billion

Excess reserves

$0

U.S. Treasury bonds held by the public

$600 billion

10. Considering only the information in Table 14.1, the basic money supply is:

A. $120 billion

B. $800 billion

C. $920 billion

D. $1 trillion

Item

Amount

Cash held by public

$120 billion

Transaction account balances

$800 billion

Required reserves

$80 billion

Excess reserves

$0

U.S. Treasury bonds held by the public

$600 billion

Explanation / Answer

BAsic money supply is M1,this contains the most liquid assets if the conomy, like cash and checkable deposits,

So answer here is 120+800 = 920 Billion

So answer is 920 billion

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